News

America's Roundup: Dollar firms amid U.S.-China trade talk hopes, Wall Street rebounds, Gold off 1-month peak, Oil prices edge up-May 15th,2019

Market Roundup

• Trump: No collapse in China trade talks, tariff war 'a little squabble'

• Fed's George says she sees no case for interest rate cut

• Dollar buoyed by trade hopes

• US Apr Import Prices MM, 0.2%, 0.7% forecast, 0.6% previous

• US Apr Export Prices MM, 0.2%, 0.5% forecast, 0.7% previous
 
• US 11 May, w/e Redbook MM, 1.3%, 1.3% previous

• US 11 May, w/e Redbook YY, 5.4%, 5.9% previous

• New U.S. mortgage and auto loan balances fall in 1st quarter

• U.S. mortgage delinquencies rose in first quarter from 18-year low at year-end -MBA

• British PM, ministers agree Brexit deal must be ratified by summer break

• EU split over how to deal with deteriorating Italian finances -officials

• Canada home prices go eight straight months without a rise -Teranet

Looking Ahead – Economic Data (GMT)

• 00:30 Australia May Consumer Sentiment, 1.9% previous

• 01:30 Australia Q1 Wage Price Index QQ, 0.6% forecast, 0.5% previous

• 01:30 Australia Q1 Wage Price Index YY, 2.3%forecas, 2.3% previous

• 02:00 China Apr Urban investment (ytd)yy, 6.4% forecast 6.3% previous

• 02:00 China Apr Industrial Output YY, 6.5%forecas, 8.5% previous

• 02:00 China Apr Retail Sales YY, 8.6% forecas, 8.7% previous

• 05:00 Japan Mar Construction Orders YY, -3.4% previous

Looking Ahead – Events, Other Releases (GMT)

• May 14 22:00 San Francisco Fed President Mary Daly speaks before the Northwestern University School of Education & Social Policy Loeschner Leadership Series in Evanston, Illinois

• May 15 08:00 ECB Governing Council member Philip Lane speaks on “The Euro at 20” in Tallinn

• May 15 12:30 German Economy Minister Peter Altmaier speaks at a banking congress in Berlin

• May 15 13:30 Fed Quarles testifies on “Supervision and Regulation” before the Senate Banking Committee in Washington

• May 15 14:15 ECB board member Benoit Coeure speaks with the Finance Committee of the Assemblee nationale in Paris

• May 15 16:30 ECB Chief Economist Peter Praet speaks at the Steptoe Brussels Open Conference in Brussels 

• May 15 17:00 Richmond Fed President Thomas Barkin participates in discussion before the New York Association for Business Economics in New York

Currency Summaries

EUR/USD: The euro slid against the dollar on Tuesday, after Italy’s deputy prime minister said the country is ready to break European Union budget rules on debt levels if necessary to spur employment. The dollar was buoyed as U.S. and Chinese officials said the two countries would continue to negotiate on trade. U.S. President Donald Trump insisted on Tuesday that trade talks with China had not collapsed and called the widening U.S.-China tariff war “a little squabble,” even as his administration readies 25% duties on all remaining Chinese imports. The euro was down 0.15 percent against the dollar at 1.1205 . Immediate resistance can be seen at 1.1243 (Daily high), an upside break can trigger rise towards 1.1281 (Higher Bollinger Band).On the downside, immediate support is seen at 1.1379 (50 DMA), a break below could take the pair towards 1.1310 (23.6% retracement level).

GBP/USD: Sterling hit a new two-week low on Tuesday, as British employment data showed wage growth in the quarter ending March was lower than expected, signalling the possible start of a turbulent period for the broader economy. Wages in Britain had grown at strong rates over the past year or so but slowed to 3.2 percent in the first quarter of 2019, data showed, lower than predictions of 3.4 percent and down from the previous reading of 3.5 percent. The data also showed employment growth slowed to 99,000, well below a median forecast of 135,000 in a poll of economists. Sterling slipped on Tuesday to a two-week low of $1.2909, down 0.3 percent on the day. Immediate resistance can be seen at 1.2973 (5 DMA), an upside break can trigger rise towards 1.3022 (9 DMA).On the downside, immediate support is seen at 1.2900 (Psychological level), a break below could take the pair towards 1.2861 (April 4th low).

USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Tuesday, as oil prices rose and investors grew more optimistic on U.S.-China trade talks, but the currency stuck to a narrow range ahead of Canada's inflation report on Wednesday. Canada runs a current account deficit and exports many commodities, including oil, so its economy could be hurt by a slowdown in the global flow of capital or trade. Oil prices rose after top exporter Saudi Arabia said explosive-laden drones launched by a Yemeni armed movement aligned with Iran had attacked facilities belonging to state oil company Aramco. U.S. crude oil futures settled 1.2% higher at $61.78 a barrel. Immediate resistance can be seen at 1.2922 (Higher Bollinger Band), an upside break can trigger rise towards 1.2943 (38.2% retracement level).On the downside, immediate support is seen at 1.3454(9 DMA), a break below could take the pair towards 1.3301 (50 DMA).

USD/JPY: The U.S. dollar strengthened against the yen on Tuesday, as optimistic comments from U.S. and Chinese officials on trade brought some comfort to markets. The Chinese government's top diplomat said China and the United States have the “ability and wisdom” to reach a trade deal that is good for both. U.S. President Donald Trump said he was optimistic about resolving the trade dispute. Fears the United States and China are spiralling into a protracted trade dispute that could derail the global economy have rattled investors in recent weeks. The dollar was 0.29 higher versus the Japanese yen at 109.62. Strong resistance can be seen at 109.67 (5 DMA), an upside break can trigger rise towards 110.46 (11 DMA).On the downside, immediate support is seen at 109.46 (50% retracement level), a break below could take the pair towards 108.94 (38.2% retracement level). 

Equities Recap

European shares gained on Tuesday, recovering most of the previous session's losses, as optimistic comments from Washington and Beijing helped soothed investors' fears about the top two economies' intensifying trade spat.

UK's benchmark FTSE 100 closed up by 1 percent, the pan-European FTSEurofirst 300 ended the day up by 0.90 percent, Germany's Dax ended up by 0.8 percent, France’s CAC finished the day up by 1.4 percent.

U.S. stocks on Tuesday reclaimed some of the ground lost in the prior day's steep sell-off, with tariff-sensitive technology stocks leading the S&P 500 and the Nasdaq higher as investors were heartened by a tonal shift in U.S.-China trade rhetoric.

Dow Jones closed down by 0.83 percent, S&P 500 ended down by 0.81 percent, Nasdaq finished the down up by 1.14 percent.

Treasuries Recap

Treasury yields rose on Tuesday in sympathy with U.S. stock indexes as hopes for a U.S.-China trade deal boosted demand for risk assets after Monday's heavy sell-off.

The yield on the benchmark 10-year Treasury note was last up 2 basis points, with other maturities trading within three-tenths of a basis point of the 10-year yield. 
Commodities Recap

Gold retreated from a one-month high hit earlier on Tuesday as stock markets and the dollar took heart after the United States and China agreed to keep negotiations going to end their prolonged trade war.

Spot gold was 0.3% lower at $1,295.18 per ounce as of 1:49 p.m. ET (1749 GMT), after hitting $1,303.26 earlier in the session, its highest since April 11.U.S. gold futures settled down 0.4% at 1,296.3.

Oil prices rose over 1% on Tuesday after top exporter Saudi Arabia said explosive-laden drones launched by a Yemeni-armed movement aligned to Iran had attacked facilities belonging to state oil company Aramco.

Brent futures gained $1.01, or 1.4 percent, to settle at $71.24 a barrel, while U.S. West Texas Intermediate crude gained 74 cents, or 1.2 percent, to $61.78.

That was the highest settle for Brent since May 6 and WTI since May 8 and caused the closing premium of Brent over WTI to rise to a nine-week high.
 


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